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the deal with the dow: after hitting 14,000, what's next? in today's cover story, a credit report. why more americans are picking up the plastic. plus, our post-super bowl coverage. we check in on the big easy after the big game. why investors are taking a second look at the latest unemployment numbers. and, more women are hopping on harleys. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, february 4th. i'm angela miles. in today's first look: sky-high stocks. investors poured money into stocks and commodities friday, pushing the dow to a close above 14,000 for
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the first time in 5 years. the nasdaq and s&p 500 also rallied along with gold and oil. a lot of green: the market moved higher after the government reported 157,000 jobs were added to payrolls and the unemployment rate ticked up but remains below 8%. also, revisions of the past two months edged up. exclusive exchange: the sec is considering an exchange for millionaires only. it would include micro- and small-cap companies. and dell shares could get extra active today on talk of a buyout deal. 57 million shares traded friday, two times the normal volume. mark sebastian of option pit mentoring joins us on this monday morning for a closer look at the markets. mark, it finally happened: the dow closed above 14,000. what does that mean to traders this week? > > well, i think that we are
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going to see that same trend that we have been seeing all of january continue through february. without a real catalyst, i think this slow grind higher continues, and we could see the dow break its all-time record this month. > it feels like restaurant week for the markets. a number of restaurant chains are reporting in, including chipotle and yum! brands. what do you expect? > > i am a big fan of both of those. chipotle and yum! brands have really been going after each other, between taco bell and chipotle. so, it should be kind of interesting to see how that competition pans out. it is kind of like coke/pepsi in the '90s. > what about the jobs number? what kind of fallout do you expect will be in the market this week from that number? > > that jobs number was... ok. and the fact that we didn't sell off on it means we are probably going to go higher on it. > would you be a buyer of this market then? it sounds like you are. > > absolutely. i would be a
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buyer of this market, and collar it with the vix at 1290 with s&p 500 options. > i am always a little concerned though as we get up here. the average investor starts to get all excited and starts putting money in. that seems to be a sell signal for some traders sometimes. not so much this time? > > not this time, because i don't think the retail public is in yet. > good to have you on the show. that is mark sebastian of option pit mentoring. consumers are resuming an old habit - buying and counting on credit. the credit-scoring firm fico found in a recent survey that requested lines of credit are up. in our cover story: is it improved consumer confidence or necessity? more americans want to get it with credit. that's the finding in a survey of u.s. consumer credit risk by the professional risk managers' international association, which found more consumers are asking for new lines of credit, leading some to believe that americans are willing to take on more debt than during the recession. "it doesn't surprise me. i think a lot of people are past
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that frugal fatigue and think 'i can afford to take risk again.'" confidence may be part of it, but greg mcbride, sr. financial analyst at, thinks it may be happening out of necesssity. "household income rose only 2.1% last year, and now that's taken away by the 2% raise in the payroll tax. so people are borrowing because of stagnant wages and resorting to credit for necessities." during the next six months, bankers expect more requests for lines of credit and balances to increase. does it mean more americans will put themselves at greater financial risk? not necessarily. "increasing your credit line sometimes can help your credit score by increasing your available credit. but opening new lines of credit can be negative, depending on everything else going on there." another credit-related development - retailers may now
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add a surcharge if you make your purchase with a credit card, though some may do so at their own risk. "there are a lot of consumers who will walk in, see the surcharge sign and walk down the street to a competitor that doesn't charge a surcharge." it's far from universal - ten states prohibit retailers from charging a credit-card surcharge. and one alternative - you may avoid the surcharge by using your debit card. home mortgages with no money down are becoming popular again. banks are said to be lending the money to affluent home buyers who are walking away with expensive mortgages without putting down a dollar. that financing strategy is blamed for causing the housing bubble and bust. but in this case, reports say banks are only dealing with home buyers with large assets. they are required to have two forms of collateral: the house and part of their
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investment portfolio. the libor scandal continues. reports say the royal bank of scotland is getting slapped with a fine this week due to its role in manipulating the libor, or benchmark interest rate. reuters says the bank could pay a fine of up to 500 million pounds. barclays' new ceo is giving up his bonus for 2012 because of the libor scandal. antony jenkins just became ceo last august and tells reporters he should "bear an appropriate degree of accountability" for the bank's difficult year. jenkins will keep his base salary of about $1.5 million. the bonus could have reached $4 million. barclays was fined $450 million for its role in the libor interest rigging scandal. the new year brought new momentum to automakers. ford, gm and chrysler all sold more cars and trucks. chrysler had its best january in 5 years, with a 16% jump. ford's sales rose 22% from last year, its best january since '06, and gm's sales topped 16%. its estmated that total auto sales hit 15.5 million last month. foreign brands helped that number. sales
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at toyota jumped a whopping 27% in january. and volkswagen celebrated its best january since 1974 - a 6.7% increase. demand for the accord helped the numbers at honda. demand for the model pushed sales up 12.7% consumer reports is out with its list of best car brands. toyota, ford, honda and chevrolet rank as the top brands with best consumer perception. motorists judged the automakers based on safety, value, performance, design, technology and environmental friendliness. it was a major plus for toyota to top the list, considering its recall issues past and present. fourth-quarter earnings wrapped up with a mixed bag of results for mattel, exxon, and tyson. mattel's profits dropped 17%, hit by a litigation charge earlier in the year. sales were up in its popular barbie, hot wheels, american girl, and fisher-price brands. exxon's earnings were up 6% in
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the fourth quarter on strength in its refinery business. but oil and gas production at the texas plant was weaker than expected. and tyson's profits jumped 11%, helped by growth in its beef and chicken businesses. investors showed healthy interest in pfizer spin-off zoetis in its first public day of trading. after pricing at $26 thursday night, zoetis shares opened at $31.50 and closed friday at $31.01. zoetis makes vaccines and drugs for livestock and pets. its a tough pill to swallow for merck & company. the drug company beat earnings estimates, but has released a cautious 2013 profit forecast. the company plans to delay action on its osteoporosis treatment until 2014. the company also notes falling global sales due to competition from generics. shares dropped 3% friday. the mcdouble could be causing trouble for mcdonald's. ground beef prices are up more than 6% and it's reportedly eating into profit margins. customers are
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lovin' the two-beef-patty burger that sells for one dollar. but it's a bad deal for franchise owners, who can lose money. according to a reuters survey, the mcdouble is selling for $1.09 in san fransico, $1.80 in alaska and $1.89 in new york. consumers will shell out big bucks in the name of love this year. come february 14th, americans will spend $20.8 billion on valentine's gifts for their sweeties. that's around $134 per person. shoppers are getting cozier with spending this year. sales are predicted to rise 3.2% from 2012. harley davidson is gearing its busines toward women. according to reports, a quarter of new motorcycle sales are to women, and the ladies make up 12% of harley sales. harley officials believe that percentage could get a boost as women become more empowered in politics and sports. still to come, post-super bowl new orleans is shining big. how the city clawed its way back on
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top. that's later. but first, why all the chatter about last year's jobs number? bill moller has answers, next. this neighborhood sure has changed a lot over the years.
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you know there was a time when people like me couldn't live here. i'll never forget being told i wasn't welcome in this neighborhood. well i own this building now, the fair housing act made a difference for someone like me. so i can choose where i want to live, free from discrimination. glad you could make it, right this way...
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it's all about the jobs. that's the key for a full, official recovery. the labor department's numbers came out friday for the first month of the new year as well as some revisions for the past 2 years. let's talk about it with brent schutte. he's the market strategist for bmo global asset management. 157,000 new private-sector jobs created. that's not where the buzz is, it's in the revisions, though. > > sure. the revisions did come out, and that is where all the buzz is. in fact, if you look last year, there were 335,000 more jobs that were added than originally reported. a lot of that came in the fourth quarter. you saw, actually, november and december revise up significantly. i believe the number was about 127,000 between those two months. > what happened to that momentum as we were closing in on 2012, because it has kind of sputtered a little bit here in january. > > sure. just like i've said before in the past, and kind of was talking about now, those initial numbers that come out, i'm not calling them guesses, but they are estimates, and usually the number could be 100,000 plus or minus each
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month. so, don't get too excited about one data point. > i haven't seen revisions, though, cause this much buzz, but then again it was because it was a full two-year revision. > > sure. all the revisions showed that there have been more people added to the workforce, which is very important over longer periods of time. an economy's growth is determined by how many people work, how hard they work, and how efficient they are. and in order to get an economy going, you need that type of an environment, so this is a good number. > economics 101. let me ask you about the participation rate. we haven't talked about that. but it is there every month. and there is some significant data there. > > sure. i guess the most significant thing that we are witnessing now is that people are staying in the workforce
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longer. so if you actually look at people who are above age 65 or even above age 60, you are seeing that they are participating in the labour force much longer than they had in the past. and that is actually a decent thing longer- term. > now, that is not necessarily for economic reasons. we are living longer after all. > > sure. we are living longer, all kinds of factors are weighing in, and i think people are just less confident in retirement, and they want to make sure they still have an income stream. probably some of that even has to do with low fixed income rates these days. in order to collect some income off your portfolio, you need to do other things than just buy bonds. > let me ask you quickly about- we've got sequestration coming up, we've got the debt ceiling, so congress is still a factor here. any worries that, now that we have passed the fiscal cliff for the moment, that those two items might cause some trouble? > > absolutely. i am still worried about that. i think, longer-term, i have mentioned that there are a lot of positive things in this country that are actually occurring. energy revitalization and independence, i think that gets undersold. the fact that our labour force is now competitive. i think longer- term those are good things. my question is how quickly we get there, and there are all kinds of speed bumps before we kind of get to that end-state nirvana. and the big factor that holds the key to that is what happens in congress. > brent schutte. thanks so much. > > thank you. the big easy is working mighty hard to make a big comeback. we'll see what's new in new
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orleans, next.
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as the monday morning quarterbacking gets underway, we wanted to give special attention to the real winner of the super bowl: new orleans. joining us via skype this morning, mark romig. he's president and ceo of the new orleans tourism marketing corporation and chair of the host committee for super bowl 47. congratulatoins on hosting a terrific event. is the city closing in on being back to where it was prior to hurricane katrina? > > that is a very good question. a lot of us believe
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that because the nfl gave us the super bowl to host when we won the bid back in 2009, that it was a way for the world to say, "new orleans, you have done a great job coming back after such a tremendous catastrophe." and in many ways we can close the door on katrina. there will always be projects that we are working on to improve our environment and improve our community. we think we have come such a long way, and it is a great lesson for the rest of the nation on resiliency, persistence, and patience as well. > what are some parts of the economy where you would like to see more growth? > > we have done such a great job with the reform of our educational delivery system. 70% of our kids are in charter schools in orleans parish, which is a tremendous growth in time for many purposes. and the medical industry, i think, has
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great opportunity. we are building a $200 million medical complex that will be the home of the veterans administration. new orleans has recently been ranked as one of the top entrepreneurial hubs in the country, so, we really see ourselves as a city that's on the move. one of the fastest growing cities from an economic standpoint in the nation. there is a lot happening and to participate in here now. > one of the areas of strength has been the restaurant industry. tell us about that. > > that is an interesting fact. we had about 800 hundred restaurants prior to hurricane katrina. since katrina we are now well over 1300 restaurants. so, i think that says a lot about our appetites, but also a lot about the visitation that has occurred in the city as we grow back our economy through visitation. we are trending very well in increasing our tourism each year, and also a lot of chefs have gone off on
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their own and opened up their own restaurants. they see opportunity. they obviously want to explore their creative streaks. and, it is just a wonderful environment for restaurant growth. so, bring your appetite when you come here. > thank you, that is mark romig. he's president and ceo of the new orleans tourism marketing corporation. congratulations again on the comeback city. > > thank you very much. great being with you this morning. fans are enjoying "souped up stadiums" around the nation, and uncovers how much taxpayers are footing the bill. green bay, wisconsin, tops the list. taxpayers each pay $1,114 to contribute to the $411-million renovation of the packers' lambeau field. indianapolis fans are also paying the price for the colts renovated lucas oil stadium, which runs americans $598 for the $749-million job. and in cincinnati, on average taxpayers are paying $543 each for the $706-million facelift to the bengels stadium. thanks chuck! are all systems go with the stock market? what the charts are telling traders, next.
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and problem solving, which can improve academic performance. this means physical activity can help your kids in the most important game of all -- life.
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welcome back to 2007, because that is where we are with the market. dan deming of stutland equities joins us now, and it is a blast from the past dan. > > it sure is angie. i think the market pulled on its deer antler spray last friday at the opening and just burst through 1500 on the s&p and 14,000 on the dow. > now, that dow 14,000, i am hearing from a lot of traders, this is just kind of a psychological number, is it not? or will it actually propel people to put more money to work? > > well, it is going to be interesting to see, angie. but certainly from a psychological standpoint, it is something that people can focus on now as a positive, rolling back toward those 2007 highs. and now we're seeing the s&p firmly above 1500 as well, so you kind of
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have a culmination of a couple things going on here: technically the market still looks in pretty good shape. consolidated around the 1500 level in the s&p for the last week-and-a-half, so there's still some possible room on the upside. plus, you have the first of the month basically kicking off on a positive side. i think that is going to probably push money managers and people who are kind of on the sidelines to kind of think about, "i need to get in this market." > great. so break this down for our viewers just a little bit more, because i know you study the charts, you trade the vix and the s&p 500 every day. so, what do you think about the s&p 500? how much more room to run is there according to what you think and the charts? > > right. if you look at the charts, if you go back and look at a long-term chart going back to the 2000 area, angie, basically you kind of see a third attempt here over 1500. we have been up here twice before, once in i believe it was like 2000, 2001, and then again in '07. now here we are in 2013, pushing that 1500 level. 1562 was the high from october of 2007, so that is something that we are keeping an eye on right now. there is probably some serious resistance at that
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level. > the vix was right around a 12. that is around where it closed on friday. so what is that telling you? > > well, you know, there is the relief rally that we got last friday from the fact that unemployment was fairly in line with expectations, and we got some other positive news that helped propel the market throughout the day. so right now, basically the vix is at a low level. but if you look at realized or historical volatility, it is even lower. you look at 20-day realized volatility - basically what has happened over the last 20 days - basically realized vol is around a 5. so even with the vix at 12, based on recent activity, you are seeing the vix still priced a little too high. however, if you look further out on the horizon, particularly in end of april, early may, if you look at the vix futures and the way the vix is acting, it is still pricing in the possibility of some volatility as we roll toward that debt ceiling situation at the end of april. > good to have you on the show this morning. that is dan deming of stutland equities. thanks dan. > > thanks angie. that wraps up our monday. coming up this week, the best time to snag a great deal on airfare if you are planning on a spring break. thank you for watching today. we hope you will join us tomorrow for our "new look." we can't wait to show you! from all of us at first business, have a good monday!

First Business
KICU February 4, 2013 4:00am-4:30am PST

News/Business. Angie Miles. (2013) New. (CC) (Stereo)

TOPIC FREQUENCY S&p 7, New Orleans 4, Angie 3, Toyota 3, Brent Schutte 2, Dan Deming 2, Barclays 2, Sebastian 2, Tyson 2, Reuters 2, Honda 2, Chrysler 2, Mattel 2, Exxon 2, Katrina 2, Ford 2, Romig 1, San Fransico 1, Antony Jenkins 1, Angela 1
Network KICU
Duration 00:30:00
Rating G
Scanned in San Francisco, CA, USA
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Tuner Channel 19 (153 MHz)
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Pixel width 704
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on 2/4/2013